EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502571
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Bluescope Steel Limited applied for a TCO in respect of certain laboratory ovens on 25 February 2005.
Instrument
TCO No 0502571 was made on 6 May 2005. It declares that those certain laboratory ovens are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 3%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0502571 is taken to have come into force on 25 February 2005.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, including the imposition of customs duties. The Act was amended to introduce a scheme under which Tariff Concession Orders (TCOs) can be made, as outlined in Part XVA, to provide relief from certain customs duties. This was introduced to address the need for specific concessions on duties for particular goods where there are no locally produced alternatives. The policy objective is to encourage the efficient use of resources by allowing the importation of goods where no suitable domestic production exists, thereby potentially reducing costs and increasing the availability of certain goods. Instrument No. 0502571, made under this Act, is an example of such a concession, specifically reducing the duty on certain laboratory ovens from 5% to 3%, reflecting the absence of substitutable goods produced in Australia.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the legislative framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This act applies to entities or individuals seeking tariff concessions for specific goods, particularly where such goods are not produced in Australia in the ordinary course of business. The process involves an application to the CEO, who then determines whether the application meets the core criteria outlined in the act, such as the absence of substitutable goods produced domestically. Once a TCO is issued, it applies retroactively from the date of the application, offering benefits such as reduced customs duty rates for the specified goods. The act extends its reach across the Commonwealth, with the TCO No. 0502571 being a practical example affecting certain laboratory ovens. Notably, the issuance of a TCO does not retroactively affect the rights of any person except the Commonwealth, nor does it impose any liabilities on any party for actions taken prior to the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0502571, under the Customs Act 1901, pertains to Tariff Concession Orders (TCOs) which can reduce the rate of customs duty on certain goods. The main sections involved are sections 269C, 269F, and 269P(3) of the Act. Section 269F allows an application for a TCO to be made by any person, whereas section 269C stipulates that such an application meets core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order (the TCO), specifying the prescribed item in Schedule 4 of the Customs Tariff Act 1995 to which the goods are subject.
The Act imposes certain obligations on the parties involved. For example, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Additionally, section 269S(1) provides that a TCO is to be taken as coming into force on the day the application for the TCO was lodged. This means that the TCO, in this case, is effective from 25 February 2005, the date the application for the TCO was made by Bluescope Steel Limited for certain laboratory ovens.
Any breach of the obligations or requirements under this Act can result in civil or criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, it is implied that failure to comply with the Act’s provisions could lead to penalties as prescribed under the Customs Act 1901. Typically, such penalties could include fines or other sanctions as determined by the relevant authorities. The explanatory statement does confirm that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person. This ensures that the TCO primarily benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.